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“The Economy is Bad–But Not For Me”

by | Apr 17, 2023 | *Financial Awakenings, Healthy Money Relationships, In The News, Money Psychology, The Economy, Weekly Column

I recently came across a new survey of personal financial and economic views of Americans done in March of 2023 by NORC at the University of Chicago, funded by The Wall Street Journal. Here are some of the findings I thought were particularly notable.

Most of us, a whopping 80%, feel the nation’s economy is poor or not so good. About as many, 85%, think the economy will actually get worse or stay about the same, and 78% think it will be worse for our children’s generation.

That perception is remarkably polarized and confusing when compared with reality, even within the survey itself. The respondents also reported the following:

  • 62% are either well satisfied or more-or-less satisfied with their present financial condition.
  • 62% say their personal financial situation is either getting better or staying the same.
  • 66% say their financial situation is better or about where they expected to be at this stage in life.
  • 72% say the rising cost of living is of no concern, not a problem, or minor in nature.

Perhaps these views reflect the reality that the economy is not in a recession, job growth is solid and exceeding expectations, and unemployment is hovering around the lowest rate since 1969.

Where is the huge disconnect between perception and reality? Why do 80% or more of Americans think the economy is bad and will get worse, while over 60% are actually satisfied with their financial situation?

My guess is that most of the disconnect is emotional in nature and largely due to the media people consume, rather than the actual economic data and the actual state of their personal finances. It makes sense that a person who may not be struggling to pay their own bills but knows people who are, and who gets information primarily from biased sources with an agenda of portraying how bad things are, may perceive economic conditions to be worse than they are.

I have previously suggested that people who do not consume a balanced media diet tend to have a hard time viewing economic reality and inherently tend to make poorer financial decisions. Much of the media outlets that embrace either liberal or conservative ideals create insecurity and anxiety that fuel political and geopolitical polarization as well as fear over automation and technological changes. These skewed perceptions often play themselves out—not in a positive way—in financial and investment decisions.

Some other views of poll respondents were troubling. Based on comparing a WSJ/NBC poll on views of Americans from 25 years ago (1998 to 2023), we find changes in the following beliefs:

  • Patriotism is very important: dropped from 70% to 38%
  • Religion is very important: dropped from 62% to 39%
  • Having children is very important: dropped from 59% to 30%
  • Community involvement is very important: dropped from 47% to 27%.
  • Hard work is very important: dropped 83% to 67%
  • Self-fulfillment is very important: dropped from 66% to 53%
  • Money is very important: rose from 31% to 43%.

However, it’s clear that most Americans still believe these issues matter. Following are the percentages if we combine the “very important” and “somewhat important” responses:

  • Patriotism: 73%
  • Religion: 60%
  • Having children: 65%
  • Community involvement: 80%
  • Hard work: 94%
  • Self-fulfillment: 91%
  • Money: 90%

While so many things have decreased in being very important to Americans, money has clearly increased in importance. Some observers may see this as a negative. I view it more positively. Amassing money is not a satisfying aim in itself. Yet money is an essential and important tool for thriving in today’s world. I hope its higher place in this poll will lead to increased financial and emotional wellbeing.

 

 

 

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